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Another bear is capitulating and buying a house - ME
Topic Started: 23 Sep 2013, 10:17 AM (2,753 Views)
Blondie girl
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Yeah
Well it's about time, honestly, these LOW IR are a bonus, so take advantage if this. As a gen x I do remember the very high interest rates in the nineties,. My brothers & my arse was puckering with those variable rates :lol but we managed to get through those stormy seas.

Also, realize us girls are not always the real stupid ones when it involves finances.

Work together, & pay off the debt to the best of your ability..hammer it hard & budget well.

When I was on my own paying the mortgages before getting married, I managed without heaps of furniture , & I got the men I dated to mostly pay my way when it came to going out for dinners , I only paid if I really, really had to.... :)



Ooooohhh

Hoofarted good on you, all the best.

Newjerk? can you try harder than dig up another person's blog. My first promo was with Billabong and my name in English is modified with a T, am Perth born but also lived in Sydney to make my $$
It's Absolutely Fabulous if it includes brilliant locations, & high calibre tenants..what more does one want? Understand the power of the two "P"" or be financially challenged
Even better when there is family who are property mad and one is born in some entitlements.....Understand that beautiful women are the exhibitionists we crave attention, whilst hot blooded men are the voyeurs ... A stunning woman can command and takes pleasure in being noticed. Seems not too many understand what it means to hold and own props and get threatened by those who do.
Banks are considered to be law abiding and & rather boring places yeah not true . A bank balance sheet will show capital is dwarfed by their liabilities this means when a portions of loans is falling its problems for the bank.
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newjez
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hoofarted
23 Sep 2013, 02:26 PM
Interesting question...

I have done the rough calculations on the house I am currently renting... Been there 3.5 years and rent has gone up 3% per year (pre-agreed). I have been renting a house worth well over a $1.1m for +- $800 p/w for the last 3.5 years and had I bought the house, with all the additional expenses they have had in this time, my initial calculations are that I would have been out of pocket many thousands over the $100K mark. So, on balance, it has been good to rent. It is difficult to equate the two but I think that I am ahead. Over the longer term, I would not be but would be happy to sign a very long lease at 3% per year increase. I would win significantly.

In the meantime, my assets in the UK have sprung back to life thanks to .GOV spending other peoples money... "holding my dick while I piss" so to say, and these have now started to turn positive (only taken 5 years). Not quite the growth over the last decade or two but not bad either. The $AUD has also eased off a bit and every 10c against the Pound puts money in my pocket.

I do not feel that I have been disadvantaged by not buying. I have lined up the banks to fund my shortfall when I am ready to buy... Now all I need is something to buy.
I think you sum up the situation fairly well. There are times when it pays to be bearish and defer buying, but as a long term strategy being bullish wins out.

Where are you both buying incidently?
Whenever you have an argument with someone, there comes a moment where you must ask yourself, whatever your political persuasion, 'am I the Nazi?'
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genX
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Blondie girl
23 Sep 2013, 03:01 PM
I got the men I dated to mostly pay my way when it came to going out for dinners ,
:lol :lol
My sides are splitting.

'dated' ..... :lol
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peter fraser
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hoofarted
23 Sep 2013, 02:26 PM
peter fraser
23 Sep 2013, 11:49 AM
If you don't mind me asking, do you think it has worked for you or against you to wait these five years, taking price rises and rental into consideration?

I do accept that there are times when prices are not moving up and rents are cheap, so on balance what is your view?
Interesting question...

I have done the rough calculations on the house I am currently renting... Been there 3.5 years and rent has gone up 3% per year (pre-agreed). I have been renting a house worth well over a $1.1m for +- $800 p/w for the last 3.5 years and had I bought the house, with all the additional expenses they have had in this time, my initial calculations are that I would have been out of pocket many thousands over the $100K mark. So, on balance, it has been good to rent. It is difficult to equate the two but I think that I am ahead. Over the longer term, I would not be but would be happy to sign a very long lease at 3% per year increase. I would win significantly.

In the meantime, my assets in the UK have sprung back to life thanks to .GOV spending other peoples money... "holding my dick while I piss" so to say, and these have now started to turn positive (only taken 5 years). Not quite the growth over the last decade or two but not bad either. The $AUD has also eased off a bit and every 10c against the Pound puts money in my pocket.

I do not feel that I have been disadvantaged by not buying. I have lined up the banks to fund my shortfall when I am ready to buy... Now all I need is something to buy.
I think that the higher the price of the property the more likely it is that you would win, as yields decrease in the high end.

I don't think the outcome would be anywhere near as advantageous for you if you rented a $500K house and you bought a $500K house, but a $1.2M house you are probably right.

Thanks for the reply and all the best.

This time next year you and shadow will be giving the bears heaps.

Any expressed market opinion is my own and is not to be taken as financial advice
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Mike
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hoofarted
23 Sep 2013, 02:26 PM
Interesting question...

I have done the rough calculations on the house I am currently renting... Been there 3.5 years and rent has gone up 3% per year (pre-agreed). I have been renting a house worth well over a $1.1m for +- $800 p/w for the last 3.5 years and had I bought the house, with all the additional expenses they have had in this time, my initial calculations are that I would have been out of pocket many thousands over the $100K mark. So, on balance, it has been good to rent. It is difficult to equate the two but I think that I am ahead. Over the longer term, I would not be but would be happy to sign a very long lease at 3% per year increase. I would win significantly.

In the meantime, my assets in the UK have sprung back to life thanks to .GOV spending other peoples money... "holding my dick while I piss" so to say, and these have now started to turn positive (only taken 5 years). Not quite the growth over the last decade or two but not bad either. The $AUD has also eased off a bit and every 10c against the Pound puts money in my pocket.

I do not feel that I have been disadvantaged by not buying. I have lined up the banks to fund my shortfall when I am ready to buy... Now all I need is something to buy.
As a renter it may make sense, lower costs and you can save more money.

However looking at your situation from an investor point of view it is a different situation.

I would hold and rent a property like the one you live (I have a similar priced house, a little cheaper) at considerable loss when you look at that one property by itself as costs - rent leaves a large loss. However as that loss applies to my taxable income and any capital gains I max also applies to my taxable income. So I can build/sell other properties at a substantial profit which increases my income and CGT liability. Holding an expensive property to rent out can offset a lot of the CGT liability depending on the size of the capital gain. So while that more expensive house will gain value over time with some cost paid by the tenant the rest of the loss helps minimise CGT liability on other investments and not just property, it applies to any asset which increases your taxable income.

So while for yourself it may look like a loss, to me its a way of making a lot more money, minimising your CGT liability while holding an investment which is appreciating in value over the long term.

Edited by Mike, 23 Sep 2013, 05:04 PM.
http://mike-globaleconomy.blogspot.com.au/
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Barista
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The_MainIander
23 Sep 2013, 10:17 AM
Problem now is that the RBA have been flat out deflating the cash rate and savings and now I am boxed into a corner by my better half.

Buying now and locking in at HISTORICAL low rates looks good.
I hear you mate.

I too have the Mrs saying she wants something bought (and renting here is a right pain in the cloaca), so I have told her we serve another couple of years in Australia and then buy OS.

I don't think anyone will stop the RE bullshit. What we need is for the RE bullshit to simply go to its own logical endpoint, and then crash.

I should also add that in our case it is easier as all our dough is in foreign currency, and more than half my income is being earned OS too.
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